Italy’s budget deficit could drop below 3% of GDP this year, potentially enabling the country to exit the EU’s fiscal constraints sooner than expected, Finance Minister Giancarlo Giorgetti said.

“It’s possible that Italy will exit the excessive-deficit procedure already this year,” indicating a 2025 fiscal gap lower than the EU’s threshold, Giorgetti said on Saturday at a meeting of regional finance chiefs in Copenhagen.

“It’s possible, it’s September and there’s still some time before we reach December. Certainly, all the turbulence at the global level doesn’t help in terms of exports and growth, but there are three months to go,” he went on to add.

The comments accelerate expectations for Italy to return to compliance with EU fiscal rules, which had previously been projected for 2026.

They come just a day after Fitch Ratings issued Italy’s first credit upgrade since 2021, reflecting confidence in the government’s budget-consolidation measures and leaving the country’s debt three notches above junk, Bloomberg reports.

Economists, however, remain more cautious, forecasting a budget deficit of 3.3% for this year.

When questioned about potential tax cuts for the middle class, Giorgetti expressed support for the idea but said that any such measures would be implemented cautiously.

“The government has ambitions but I also have a responsibility, as Fitch’s rating upgrade shows, to remain on a safe path. Therefore these things will be done within a safe path,” he said to reporters.

Prime Minister Giorgia Meloni’s government is working to ease the tax burden, especially for those earning between €28,000 and €60,000 annually. Efforts to support low- and middle-income earners and simplify the tax system have been a recurring theme in fiscal measures since she took office.